Sales for the third quarter increased by 6% or $2.6 million to $46.3 million from $43.7 million in the third quarter of 2006. Comparable store sales increased 9%. Year-to-date sales increased 8% to $135.9 million while comparable store sales increased 10%. Along with a strong Boxing Week, Danier began to realize the benefits of focusing its merchandise offering and marketing programs on its core customer.

Gross profit as a percentage of revenue during the third quarter of 2007 increased by 0.2% to 45.5% compared with 45.3% during the third quarter last year. Year-to-date gross profit as a percentage of revenue increased by 1.1% to 48.9% compared with 47.8% during the same period last year. Improved merchandise planning, less carryover merchandise from prior seasons and less discounting contributed to the increase.

Selling, general and administrative expenses ("SG&A") during the third quarter of 2007 increased by $0.1 million on a $2.6 million sales increase. Year-to-date SG&A decreased by $1.7 million on a $9.5 million sales increase.

Net earnings during the third quarter of 2007 increased by $0.8 million to net earnings of $0.6 million, or $0.09 per share compared with a net loss of $0.2 million, or $0.03 per share, in the third quarter last year. Year-to-date net earnings were $4.1 million, or $0.62 per share, compared with a net loss of $0.9 million, or $0.14 per share, last year. Operating earnings before depreciation and amortization (EBITDA) increased by $1.2 million to $2.3 million from $1.2 million in the third quarter last year. Year-to-date EBITDA increased $7.8 million to $10.9 million from $3.1 million during the same period last year.

During the quarter a Danier store was opened under license in Dubai in the United Arab Emirates.

Progress has been made on improving Danier's performance through focusing its merchandise offering and marketing programs on its core customer, implementing improved merchandise planning processes and reducing SG&A. About Danier

Danier Leather Inc. is a leading integrated designer, manufacturer, and retailer of high-quality leather and suede clothing and accessories. The Company's merchandise is marketed exclusively under the well-known Danier brand name and is available only at its 92 shopping mall, street-front, and power centre stores, or through its corporate sales division. For more information about the Company and our products, see www.danier.com.

(1) EBITDA is defined as net earnings (loss) before interest expense (income), income taxes, depreciation and amortization. EBITDA is a financial metric used by management and some investors to compare companies on the basis of operating results and its ability to generate cash flows to fund its cash requirements, including the Company's capital expenditure program. EBITDA is not a recognized measure for financial presentation under Canadian generally accepted accounting principles ("GAAP"). Non-GAAP earnings measures such as EBITDA do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other issuers. EBITDA is calculated as outlined in the following table:

Note: This press release may contain forward-looking statements which reflect the current view of Danier with respect to the Company's objectives, plans, goals, strategies, future growth, results of operations, financial and operating performance and business prospects and opportunities. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at which, such performance or results will be achieved. Any statements in this press release containing forward-looking information are qualified by these cautionary statements.

Forward-looking statements are based on information available at the time they are made, underlying assumptions made by management and management's good faith belief with respect to future events, and are subject to inherent risks and uncertainties surrounding future expectations generally. Such risks and uncertainties include, but are not limited to, fashion and apparel and leather industry risks that can affect demand for the Company's products and inventory markdowns, change in consumer shopping patterns away from shopping malls and power centres, unseasonably hot weather or severe weather that prevents customers from going to the Company's stores, seasonality, heightened competition including new competitors and expansion of current competitors, foreign currency fluctuations which result in increased costs, leather availability and prices, risks associated with foreign sourcing and manufacturing and existing and potential class action legal proceedings.

Danier cautions readers that this list of factors is not exhaustive and that should certain risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. There can be no assurance that the actual results, events or activities anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. Potential investors and other readers are urged to consider these factors carefully in evaluating forward looking statements and are cautioned not to place undue reliance on any forward looking statements.

For additional information with respect to certain of these risks or uncertainties, reference should be made to Danier's continuous disclosure materials filed from time to time with Canadian Securities Regulatory Authorities, which are available on SEDAR at www.sedar.com and in the Investor Relations section of the Company's website at www.danier.com. Additional risks and uncertainties not presently known to the Company or that Danier currently believes to be less significant may also adversely affect the Company. Danier disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investors and analysts are invited to participate in a conference call today at 4:00 PM Eastern Time to discuss the results. Please dial 416-695-5259 in the Toronto area or 1-877-888-7019 (rest of Canada and the U.S.) and quote the Danier Leather Inc. conference call with chairperson Jeffrey Wortsman at least five minutes prior to the call. The call will also be webcast at www.danier.com or at www.ccnmatthews.com.

DANIER LEATHER INC. CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND RETAINED EARNINGS(Unaudited)(thousands of dollars, except per share amounts and number of shares)------------------------------------------------------------------------------------------------------------------------------------------------------

For the 13 Weeks Ended For the 39 Weeks Ended ----------------------- ------------------------ March 24, March 25, March 24, March 25, 2007 2006 2007 2006 ----------------------- ------------------------

DANIER LEATHER INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFor the 13 week and 39 week periods ended March 24, 2007 and March 25, 2006(Thousands of dollars, except per share amounts and number of shares) - Unaudited

1. SIGNIFICANT ACCOUNTING POLICIES:

(a) Basis of Presentation:

The interim consolidated financial statements presented herein follow the same accounting policies and their methods of application as those used in the 2006 annual consolidated financial statements. Generally accepted accounting principles ("GAAP") for interim consolidated financial statements do not conform in all respects to the disclosures required for annual financial statements, and accordingly, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Danier Leather Inc. ("the "Company") and the accompanying notes contained in the Company's 2006 Annual Report.

The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on management's best knowledge of current events and actions that the Company may undertake in the future. Significant areas requiring the use of management estimates relate to the determination of litigation award reserves, inventory valuation, realizable value of property and equipment, future income tax assets and liabilities, and income tax provisions. By their nature, these estimates are subject to measurement uncertainty and the impact on the consolidated financial statements of future periods from changes in estimates could be material.

(b) Comparative Figures:

Certain of the prior period's figures were reclassified to conform with the current period's financial statement presentation.

2. SEASONALITY OF RETAIL OPERATIONS:

Due to the seasonal nature of the retail business and the Company's product lines, the results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the fiscal year. Generally, a significant portion of the Company's sales and earnings are generated during the fiscal second quarter, which includes the holiday selling season. Sales are generally lowest and losses are experienced during the period from April to September.

The computation of dilutive options outstanding only includes those options having exercise prices below the average market price of Subordinate Voting Shares during the period. The number of options excluded was 577,841 and 586,441 for the 13 week and 39 week periods ended March 24, 2007, respectively. The number of options excluded was 590,799 and 584,414 for the 13 week and 39 week periods ended March 25, 2006, respectively.

(d) Stock Option Plan

The Company maintains a Stock Option Plan for the benefit of directors, officers and employees. As at March 24, 2007, the Company has reserved 904,175 Subordinate Voting Shares for issuance under its Stock Option Plan. As at March 24, 2007, there were 594,300 options outstanding with exercise prices ranging from $6.02 to $15.85.

The following transactions occurred during the 13 and 39 week periods ended March 24, 2007 and March 25, 2006 with respect to the Stock Option Plan:

The fair value of the options granted during the 13 and 39 week periods ended March 24, 2007 was $4.34 per option and was estimated using the Black-Scholes Option Pricing Model. Key assumptions included an assumed risk free interest rate of 4.17%, expected volatility of 37% and an expected option life of 10 years. Further details of the Stock Option Plan are contained in Note 7(e) of the consolidated financial statements contained in the Company's 2006 Annual Report.

Prior to fiscal 2004, the Company used settlement accounting to account for its Stock Option Plan. No compensation cost was recorded when stock options were granted. When options were exercised, consideration paid by employees and directors was recorded in the financial statements as an increase of share capital based on the exercise price of the options.

In accordance with the transitional provisions of CICA Handbook Section 3870, the Company applied the fair value based method to account for stock options on a prospective basis. Therefore, stock options granted during fiscal 2003 continue to be accounted for using the settlement accounting method and the pro-forma effect on net earnings (loss) and earnings (loss) per share are disclosed below. Had compensation cost been determined using the fair value-based method at the grant date of the stock options awarded to employees and directors during fiscal 2003, the pro-forma net earnings (loss) and earnings (loss) per share for the 13 week and 39 week periods ended March 24, 2007 and March 25, 2006 would be as follows:

The pro-forma effect on net earnings (loss) of the period is not representative of the pro-forma effect on future periods because it does not take into consideration the pro-forma compensation cost related to options awarded prior to June 29, 2002.

(e) Deferred Share Unit Plan

Effective October 19, 2004, the Company established a Deferred Share Unit ("DSU") Plan for non- management directors. The DSU Plan is administered by the Board of Directors, with the advice of the Governance, Compensation, Human Resources and Nominating Committee. Under this plan, non- management directors of the Company receive an annual grant of DSUs and can also elect to receive their annual retainers and meeting fees in DSUs. A DSU is a unit equivalent in value to one Subordinate Voting Share of the Company based on the five-day average trading price of the Company's Subordinate Voting Shares on The Toronto Stock Exchange immediately prior to the date on which the value of the DSU is determined. When dividends are paid by the Company, an equivalent number of DSUs are added to the DSU account of the non-management director based on the number of DSUs in their account and the market value of the Subordinate Voting Shares on the date the dividend is paid. After retirement from the Board of Directors, a participant in the DSU Plan receives a cash payment equal to the market value of the accumulated DSUs in their account.

The following transactions occurred during the 13 and 39 week periods ended March 24, 2007 and March 25, 2006 with respect to the Deferred Share Unit Plan:

Effective April 20, 2005, the Company established a Restricted Share Unit ("RSU") Plan as part of its overall executive compensation plan. The RSU Plan is administered by the Board of Directors, with the advice of the Governance, Compensation, Human Resources and Nominating Committee. Under this plan, senior officers of the Company are eligible to receive a grant of RSUs that generally vest on each anniversary of the grant in equal one-third instalments over a vesting period of three years. An RSU is a unit equivalent in value to one Subordinate Voting Share of the Company. When dividends are paid by the Company, an equivalent number of RSUs are added to the RSU account of the senior officer based on the number of RSUs in their account, the dividend paid per Subordinate Voting Share and the market value of the Subordinate Voting Shares on the date the dividend is paid. Upon the exercise of the vested RSUs, a cash payment equal to the market value of the exercised vested RSUs will be paid to the senior officer.

The following transactions occurred during the 13 and 39 week periods ended March 24, 2007 and March 25, 2006 with respect to the Restricted Share Unit Plan:

In fiscal 1999, the Company and certain of its directors and officers were served with a Statement of Claim under the Class Proceedings Act (Ontario) which made allegations about the accuracy and disclosure of certain information contained in a financial forecast issued by the Company and contained in the Prospectus it issued dated May 6, 1998 for its initial public offering ("IPO") which closed on May 20, 1998. The suit sought damages to be paid equal to the alleged diminution in value of the Subordinate Voting Shares sold under the Prospectus.

In October 2001, a motion to certify the action as a class proceeding was granted. The trial commenced in the Superior Court of Justice (Ontario) in May 2003 and was completed in January 2004. On May 7, 2004, the trial judge issued a judgment against the Company and two of its Senior Officers in favour of the Plaintiffs and awarded damages to Canadian shareholders who purchased Subordinate Voting Shares under the Prospectus. For those shareholders who sold their shares between June 4 and 9, 1998, the trial judge awarded the difference between the IPO price and the price at which they sold their shares. For those shareholders who sold or still held their shares after June 9, 1998, the trial judge awarded $2.35 per share.

Although the trial judge concluded that at the date of the Prospectus the forecast was reasonable, and that at the time of closing of the IPO the Company's CEO and CFO had an honest belief that the forecast could still be achieved, and although he held that the forecast was, in fact, substantially achieved, the trial judge decided that management's judgment that the forecast was still achievable at the time of closing was not reasonable and that therefore the Prospectus contained a misrepresentation. Based solely on information available at the time, the Company estimated that the trial judge's award would have totaled approximately $15 million. As noted below, the Company and its Senior Officers successfully appealed this decision to the Court of Appeal for Ontario; a decision on a further appeal taken by the Plaintiffs to the Supreme Court of Canada is, as noted below, under reserve.

In May 2005, the trial judge awarded the Plaintiffs a portion of the costs claimed for the action and referred for assessment the amount of costs to be paid. Based solely on the information available at the time, the Company estimated that these costs would have amounted to approximately $3 million to $4 million.

A hearing to determine the awarding of costs related to the certification and summary judgment motion which was decided in 2000 and 2001 was held in December 2004. In June 2005, partial indemnity costs were awarded to the Plaintiffs for these motions in an amount to be assessed. The Company has appealed this decision and the appeal is still waiting to be heard.

In June 2004, a Notice of Appeal was filed by the Company and two of its Senior Officers from the trial judge's decision. The appeal was heard by the Ontario Court of Appeal in June 2005 and in December 2005, the Court of Appeal unanimously allowed the appeal on three separate grounds, set aside the trial decision and dismissed the class proceeding. As a result, the Company and its Senior Officers are not required to pay any of the damages, interest or costs awarded by the trial judge. The Court of Appeal's decision stated that the Company had met its disclosure obligations in the Prospectus and during the IPO process and the trial judge erred in finding that any misrepresentation had occurred. In September, 2006 partial indemnity costs were awarded to the Company for the appeal in the amount of $100,000. The Court of Appeal also awarded costs to the Company for the trial on a partial indemnity basis in an amount to be determined.

In February 2006, the Plaintiffs filed an application for leave to appeal from the Court of Appeal's decision to the Supreme Court of Canada. In June 2006, the Supreme Court of Canada granted leave to appeal to the Plaintiffs. The appeal was heard by the Supreme Court of Canada in March 2007. The Court reserved its decision. It is anticipated the decision will likely be released before the end of calendar 2007.

Based solely on the information available at the time, if the damages, costs and interest awarded by the trial judge had been paid at the fiscal 2005 year-end, the Company estimated this amount to be about $18 million. During the fourth quarter of 2004, the Company recorded an expense and set up a provision of $15 million to reflect the trial judge's decision. This provision was subsequently increased by $3 million to $18 million during the fourth quarter of 2005 to take into account the trial judge's award of costs which was released in May, 2005. The provision for recovery of income taxes related to the trial judge's award was based on the entire $18 million provision and the provision did not take into account the potential results of the appeal, any possible insurance recoveries or future tax adjustments. The provision for the damages award, costs and interest and the income tax recovery were based on management's best estimate and is subject to adjustment when all facts are known and all issues are resolved. The possible adjustment could be significant. Although the Court of Appeal has set aside the trial judge's decision, the provision will remain until the Supreme Court of Canada makes a final determination.

In addition to the class action matter discussed in Note 8, in the course of its business, the Company from time to time becomes involved in various claims and legal proceedings. In the opinion of management, all such claims and suits are adequately covered by insurance, or if not so covered, the results are not expected to materially affect the Company's financial position.

(b) Guarantees

The Company has provided the following guarantees to third parties and no amounts have been accrued in the consolidated financial statements for these guarantees:

(i) In the ordinary course of business, the Company has agreed to indemnify its lenders under its credit facility against certain costs or losses resulting from changes in laws and regulations or from a default in repaying a borrowing. These indemnifications extend for the term of the credit facility and do not provide any limit on the maximum potential liability. Historically, the Company has not made any indemnification payments under such agreements.

(ii) In the ordinary course of business, the Company has provided indemnification commitments to certain counterparties in matters such as real estate leasing transactions, director and officer indemnification agreements and certain purchases of property and equipment such as computer software. These indemnification agreements generally require the Company to compensate the counterparties for costs or losses resulting from legal action brought against the counterparties related to the actions of the Company. The terms of these indemnification agreements will vary based on the contract and generally do not provide any limit on the maximum potential liability.

(iii) The Company sublet one location during the first quarter of fiscal 2007 and one location during fiscal 2004 and has provided the landlords with guarantees in the event the sub-tenants default on their obligation to pay rent. The terms of the guarantees are between 1 and 2 years and the Company's maximum exposure is $449.

11. COMMITMENTS :

(a) Operating and capital leases

Minimum rentals for the next five 12 month periods and thereafter, excluding rentals based upon revenue, are as follows: